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Capital Allowances

2020/2021 2021/2022 2022/2023
Main rate pool: writing down allowance
18% 18% 18%
Special rate pool (long life assets, integral features): writing down allowance 6% 6% 6%
Annual Investment Allowance (AIA) cap: £1,000,000 £1,000,000 £2,000,000
Structures and Buildings Allowance 3% 3% 3%

Expenditure within the AIA qualifies for 100% allowance in the year of purchase. The AIA cap is currently £1,000,000 from the 1st January 2019 for two years. On the 1st of January 2022 the AIA limit will be reduced to £200,000 again. If the accounting period is shorter or longer than 12-months the AIA cap is apportioned based on the length of the period.

The AIA allows businesses to invest in equipment and fixtures (cars and buildings don't qualify), with 100% tax relief in the year of purchase.